Retail sales showed a meagre rise in June after a fall in May but they still notched up the longest period of sustained growth since before the recession, official data showed today.

Sales volumes rose just 0.1 per cent in June, below forecasts for a 0.3 per cent increase, the Office for National Statistics data showed, with consumers possibly distracted by the Fifa World Cup. The year-on-year rise of 3.6 per cent
was down from 3.9 per cent in May - undershooting forecasts that it
would remain unchanged.

Despite being below expectations the retail data is strong enough to bode well for tomorrow's second quarter UK economic growth reading from the ONS.

Mixed data: While monthly retail sales in June were weaker than expected, second quarter retail sales volumes were the strongest in 10 years

Retail sales fell by 0.5 per cent in May compared to April, which had seen a strong 1.3 per cent monthly rise boosted by a strong, late Easter trading period.

The ONS said then that there would have been a bigger decline in May, which was the first fall since January, had it not been for sales of replica shirts and other World Cup-related items.

But today’s data still showed sales in the three months between April and June were up 1.6 per cent on the previous period, the 16th consecutive quarter of growth, with second quarter retail sales volumes the strongest in 10 years.

Comparing the second quarter with the same period last year, sales were up 4.5 per cent, the strongest calendar quarter since the end of 2004, the ONS said.

Meanwhile, the amount spent online increased 13.4 per cent in June compared with last year, although this fell slightly by 0.1 per cent against May.

Data for June from the British Retail Consortium, released on Monday, was also dull, showing retail footfall board was 0.7 per cent lower than a year ago and down on the 0.2 per cent fall in May.

Howard Archer, chief UK and European economist at IHS Global said: ‘It may well be that consumers took a bit of a breather in June itself ahead of their summer holidays after splashing out at a rapid rate earlier on this year.’

But he added: ‘Significantly, survey evidence from the CBI indicates that retail sales rebounded markedly in July, seemingly helped by the warmer weather.’

While retail sales volumes have been rising sales values have been more subdued reflecting inflation

The Confederation of British Industry distributive trades survey, published yesterday, showed its retail sales balance rose to +21 in July from +4 in June and above economists' forecasts of +16.

July’s sunny weather seemed to have revived Britain’s appetite for shopping with the CBI also saying sales expectations for August had picked up to +36, up from +17 in July.

The CBI survey showed particularly strong reported sales for summer clothing and food, especially that for barbecues. It also highlighted notable demand for furniture and carpets, which looked to reflect the recent improvement in housing market activity.

The CBI data reinforced the idea that Britain is still seeing a steady consumer-led recovery.

But he added that the quarterly trend continued to support the view from the Bank of England that the economy is maintaining its positive momentum.’

Britain's consumers have been the main driver of the country's economic recovery which began last year, helped by low levels of consumer price inflation - despite a surprise surge in CPI last month - that has eased the pressure on their spending power, although weak wage growth remains an issue.

Falls in fuel prices has meant sales values have declined for petrol stations

IHS chief UK economist Howard Archer said: ‘It is questionable how strong consumer spending can be on a sustained basis until earnings growth picks up appreciably.

‘The missing link as far as consumers are concerned is decent earnings growth, while there may also be some concern at the increased speculation of an interest rate hike before the end of 2014.’

UK interest rates stand at a historic low of 0.5 per cent, with many economists expecting a rate rise in the last quarter of this year or the first quarter of 2015 as the solid recovery in the economy continues.

Growth data due tomorrow is expected to show Britain’s gross domestic product grew by 0.8 per cent in the second quarter, unchanged from the first three months of the year, although there is also some risk of a lower growth rate after recent industrial output figures were weaker than expected in May. Retail sales account for just under 6 per cent of GDP.

David Kern, Chief Economist at the British Chambers of Commerce said: “The rise in retail sales figures in June supports our view that we will see strong GDP growth in Q2.

‘With no inflation in the retail sector, these figures reinforce the case that the MPC must avoid any early interest rate rises.

‘Overall, economic growth remains on course but the recovery is still facing obstacles and this is no time to take risks. The government’s main priority must be to underpin the recovery and introduce balanced measures that support exports and investment.’

Clothing sales have seen a steady rise in volumes as values track store price inflation

John Bulford, economic advisor to the EY ITEM Club said: “June ended a run of volatile monthly growth rates in retail sales. However, retail sales expanded by 1.6 per cent in Q2, which was the strongest quarterly pace of growth for over a decade. This reaffirms our belief that we will see GDP growth of around 0.9 per cent in tomorrow’s preliminary estimate for Q2.

‘The strength of consumption is set against an increasingly robust backdrop. Rather than fuelling their spending habits by saving less, as we saw for much of 2013, households are benefitting from rising disposable incomes, with the strength of employment growth playing a vital role.’

Britain’s growth is in line for another vote of confidence from the International Monetary Fund today, when it updates its forecasts for the global economy.

IMF chief Christine Lagarde hinted earlier this month that the global outlook would be downgraded following a bleak start to the year in the US and a slowdown in emerging markets. But with the UK economy growing strongly the Fund could again raise its forecasts.

Strong growth in volumes at non-food stores has been the main driver for annual retail sales